Rejoice, 'Tanks Are Getting Cheaper', Says Rheinmetall CEO

With seemingly limitless spending (debt-creation) potential, Europe is pissing away its standard of living to chase the impossible dream of, finally, emulating the US military-industrial complex

Once again, a bit ‘more’ about the March of Folly, c. 2025, which also relates to this revelatory comment by NATO’s former sock-puppet-in-chief (a position currently held by cosplayer Mark Rutte), delivered in February 2023:

BOMBSHELL: NATO Sec-Gen Stoltenberg in Brussels: 'The war…started in 2014.'

Today’s piece isn’t directly about Mr. Stoltenberg or the conflict in Ukraine, nor is it about the meeting between presidents Putin and Trump (don’t read anything into the sequence: my go-to method when listing is doing so alphabetically, if no other option appears more useful).

We’re still on the subject of the March of Folly that’s currently spreading like a wildfire in Europe, and today, I’ll give you my exhibit A as regards the economic dislocations manifesting these days.

Translation, emphases, and [snark] mine.

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Rheinmetall Sounds the All-Clear: Tanks Are Getting Cheaper

The arms boom is ensuring full order books for Germany’s largest arms manufacturer. However, the huge demand will not drive up prices, says Rheinmetall CEO Armin Papperger, assuring: ‘We are in a position to deliver.’ [in case you required confirmation that militarism and gov’t overreach won’t destroy whatever market-related aspects of our economy are were left].

By Jan Gänger, NTV, 12 Aug. 2025 [source; archived]

Since the Russian invasion of Ukraine, Western arms companies are experiencing a boom in orders [that would be—since 2014, right? That’s at least what NATO’s former chief sock puppet Jens Stoltenberg claimed in 2023]. Despite the immense demand, Rheinmetall CEO Armin Papperger is confident that governments will not have to pay more for tanks, armoured vehicles, and artillery systems in the coming years [well, since the military-industrial complex charges massively over-priced rates in the first place, we must enquire about the comparative lingo here: ‘will not have to pay more’ than…what’s the current price for, say, a Leopard 2 tank? As per Wikipedia’s German-language entry, we learn the following:

The system price for a Leopard 2 in the 21st century is said to be between three and seven million euros, which fluctuates due to inflation and exchange rates, and also depends on the number ordered. In addition to the vehicle, the price includes technical support and spare parts for a certain period of time.

We note, in passing, that the Leopard 2 was to be phased out after 2030 and replaced by a—delayed French-German successor project, which will not be available before 2040 (claims Wikipedia). So, let’s hope™ that for the time being, there will be ‘nuff spare parts for the Leopards…]

In the Financial Times, Papperger responded [archived] to fears that rising defence spending in Europe could lead to price increases. This is not the case, said the head of Germany’s largest arms manufacturer. Prices are falling. The reasons for this are the increased use of automation and scaling. Scaling means that with higher production, fixed costs (for example, for machinery) are spread across more units, thus reducing the cost per unit [here’s a bit from the FT piece, which I think is worth citing:

You see, falling prices per unit ‘should be good also for the customer’ (militaries using the Leopard 2), it is claimed; based on, well, all of history, I think the opposite is true]

According to Papperger, the cost of ammunition has already fallen. Rheinmetall has increased its ammunition production capacity tenfold over the past three years in response to rising demand [what do you think is going to happen with all these shells? They will be sold/used]. However, such economies of scale are more difficult to achieve with tanks and armoured vehicles. Papperger emphasised that Rheinmetall has never demanded a price increase to offset the high inflation resulting from the coronavirus pandemic [oh, the gov’t Covid response did cause the current bout of inflation, who would’ve thought that…¹]

Rheinmetall is expanding its production and is looking for new business for further growth [i.e., more arms to sell]. As Papperger announced last week after the release of its quarterly figures, the company is in discussions with partners in the naval sector and intends to invest there. The group is taking over a site for the development of military drones near Braunschweig. Papperger also expects orders worth billions: the order books could swell to a volume of 120 billion euros by mid-2026.

Group Focuses on Cooperation

Rheinmetall expects numerous orders from the Bundeswehr in the second half of the year. Due to the federal election in February and the subsequent formation of a government, ‘contract awarding in Germany will only start significantly later in the second half of the year’. Papperger said that ‘strong order intake’ is expected, especially in the fourth quarter [well, it’s gonna be Christmas and Easter combined for the military-industrial complex].

Sales increased by 24 per cent to €4.7 billion in the first half of the year, with the ammunition business reaching a record sales volume of €1.3 billion. Rheinmetall plans to inaugurate Europe’s largest ammunition factory in Lower Saxony shortly. The group's operating profit rose by 18 per cent to €475 million.

Papperger told the Financial Times that Rheinmetall expects ‘thousands and thousands’ of orders over the next twelve months for products such as the Boxer transport vehicle, the Puma infantry fighting vehicle, and the Leopard 2. Although the main battle tank is manufactured by the German-French company KNDS [we’ll get to that one shortly], the turret is manufactured by Rheinmetall. ‘We are able to deliver’, Papperger said. ‘If you deliver, you make the customer happy—and the customer is the government.’

Rheinmetall is relying on alliances with other defence companies to meet demand. The Düsseldorf-based company plans to build tanks in a joint venture with the Italian company Leonardo [a long-standing partner in military ventures]. They are also negotiating exclusively with Leonardo to take over Iveco’s military truck business. Furthermore, Rheinmetall cooperates with US giant Lockheed Martin, producing aircraft parts with them in Weeze, North Rhine-Westphalia. Joint missile construction is underway. Rheinmetall’s civilian factories are being converted to military production, and the VW site in Osnabrück is under consideration. However, the Rheinmetall CEO stated that no decision has yet been made in this regard.

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Bottom Lines

Let’s note, first, that NTV simply translated and slightly edited the FT piece: this ain’t but reporting™.

Beyond that, here’s a bit to know about how defence contracting works™ in Europe: it’s all about spreading the production/grifting across as many jurisdictions as possible to make it exceptionally hard, if not outright impossible, to wind down one program without a (more expensive for the taxpayer) replacement.

This is still from the German Wikipedie entry cited above:

For the manufacturer KNDS Deutschland (formerly Krauss-Maffei Wegmann), [the Leopard 2] is a commercial success, with approximately 3,600 units built. By 2008, the German Armed Forces had reduced its number of active Leopard 2s from 2,125 in 1990 to 328.

At 3-7m euros per tank, we’re talking earnings for KNDS ranging from 1-2.5b euros. Imagine, though, that these weapon systems were subsequently reduced from over two thousand operational tanks to 328—it’s a gigantic boondoggle.

Unconfirmed rumours note 1,000 new Leopard 2A8 tanks are ordered by the Bundeswehr, which would, of course, all require ammunitions, spare parts, new gadgets, etc.

Who knows when these will be delivered.

Here’s a bit more about Europe’s military-industrial complex, here exemplified by KNDS Deutschland GmbH & Co.:

KNDS Deutschland GmbH & Co. KG (until March 2024 Krauss-Maffei Wegmann GmbH & Co. KG) is a German defense company based in Munich-Allach and part of the KNDS Group. KNDS Deutschland produces wheeled armored vehicles such as the ATF Dingo, Fennek, Mungo, and GTK Boxer (with Rheinmetall), as well as tracked vehicles such as the Leopard 1, Leopard 2, the Panzerhaubitze 2000, the MLRS (German Armed Forces designation ‘Medium Artillery Rocket System—MARS’), the Puma (with Rheinmetall), and the RCH 155 wheeled howitzer.

KNDS Deutschland is a subsidiary of the KNDS Group:

KNDS N.V., formerly KMW+Nexter Defense Systems N.V., is a Dutch defence company based in Amsterdam. It was formed through a merger of Krauss-Maffei Wegmann and Nexter and is half-owned by the French Agence des participations de l'État and the Wegmann Group.

So, KNDS is technically part of a joint French-German heavy/arms industry conglomerate headquartered in the Netherlands. Hilariously, here’s the gist of who makes these stock prices (sic) rise:

For years, the German defence industry had been suffering from the Bundeswehr’s austerity measures [if your only major customer spends differently, it sucks]. As a result, the tank manufacturer Krauss-Maffei Wegmann (KMW) planned to reposition itself and pursued a merger with its French competitor Nexter [classic move in saturated markets: let’s simply merge and monopolise the niche: think of high finance, or Lockheed-Martin]. These plans, however, met with some criticism in German politics, but this did not prevent KMW CEO Frank Haun and Nexter CEO Philippe Burtin from sticking to their merger plans.[2] Both signed a memorandum of understanding in Paris on 1 July 2014.[3] In it, the two defence companies agreed to merge under a joint 50:50 holding company called KANT by spring 2015.[4][5] Nexter was wholly owned by the French state and was to be privatised following a proposal by then-Minister of Economy and Industry Emmanuel Macron. The company designed the Leclerc main battle tank, while Krauss-Maffei Wegmann developed the Leopard 2 [you see, Nexter and KMW were competitors, but they found it more useful to merge and become a single, too-big-to-fail private™ behemoth].

So, basically, we’re observing a amalgamation of various medium-sized companies into large monopolies. None of this is new or somehow different from past experiences, be they in finance, arms production, or related to consumer goods.

Hence, we must talk more about de facto sectoral monopolies that operate beyond the regulatory purview of any individual gov’t, let alone the de facto federalising set-up of the EU. Add secrecy and national security™ to the mix, and you’re getting a system™ that breeds corruption, which is also how this will play out: more and more money will flow in these companies™.

Here’s a list of donations to political parties c. 2023. Rheinmetall is among the CDU’s top donors, which currently holds the chancellorship: call me surprised (not).

You see, there is nothing new, magical, or incomprehensible here.

Hence, I’ll close this piece by turning, once more, to journalist and columnist John T. Flynn’s As We Go Marching (1944), and I am specifically highlighting Part Three, Chapter IV (but I highly recommend reading the entire book):

Far more important than war is the preparation for war. Indeed war itself is often a by-product of this preparation and of the circumstances which lead to preparation. Preparation for war is far more effective than war as an antidote against unemployment. War produces a more complete result but it is temporary, passes swiftly, and leaves behind it immense dislocations. But preparation for war can go on for a long time—for forty years in Germany and France and Italy. War or preparation for war establishes the government as the one big customer for the one big industry to which almost all industries become tributary: the armament industry. Preparation for war—national defense, it is called—can take a million or more men in this country in peacetime out of the labor market and put them in the army while at the same time three times as many can be drawn into the industries which provide them with tanks, planes, guns, barracks, food, clothes, etc., all paid for by the government with funds raised largely if not altogether by debt.

Just a brief comment: these few lines explain, much better than anything else, why ‘the Left™’ consistently favours such policies: because it enlarges ‘the state’ and thus advances the left-wing aims. At this point in time, ‘the Right™’ is also all-in on these shenanigans, if only because of the corrupting power of money while ostensibly fronting as those who ‘run the gov’t’.

It won’t surprise you, I suppose, that Mr. Flynn, although very prominent in the 1930s, was cancelled and memory-holed after WW2. He also wrote a quite ‘unflattering’ biography of FDR’s presidency entitled The Roosevelt Myth (1948) that I similarly recommend.

One more snippet from Flynn to drive home that point:

War as an economic instrument is possible because it is possible to work up a moral support for war—or for national defense. War produces its economic effects wholly by sending the government off upon a gigantic spree of spending borrowed funds. It would be possible to obtain the same effects by spending borrowed funds on any other sort of project. But there is, as yet, no project behind which the necessary moral energy can be generated.

You see, the German Wikipedia entry ‘Leopard 2’ cited in this piece notes that there are up to ‘1,500’ (sub)contractors involved in the construction of the tank.

It’s a huge boon to all of them, and the ramping up of production is already replacing civilian capacities, hence the only possible answer to the Western slide into an economic depression will be as old as time: blame an outside (Russia! Russia! Russia!), claim the moral high-ground (we’re defending™ our allies and partners), and pour money into the arms industry.

It’s all happened before, and it is happening once again.

I suppose we must next speak about how, exactly, the ramping up of military spending prior to WW2 was achieved.

1. I also asked Grok (mainly for fun’s sake), and here’s the answer:

Thought [sic] for 1m 1s

The post-COVID inflation surge that peaked in 2021–2022 was driven by a combination of factors, including global supply chain disruptions, shifts in consumer demand, energy price shocks, and labor market imbalances stemming from the pandemic itself. While expansive fiscal and monetary policies—such as stimulus packages, low interest rates, and quantitative easing—played a role in boosting demand and exacerbating price pressures in certain sectors, they were not the primary or sole cause according to a broad consensus of economic analyses. Instead, these policies helped mitigate a deeper recession and supported a faster recovery compared to other countries, even as inflation rose worldwide. Claims that government COVID responses directly ‘caused’ the inflation often overlook these multifaceted dynamics and the global nature of the price increases.